Germany Between 2001 And 2010 Essay Examples
People of Germany believed that strong export ties and healthy trade surplus are indicators of prosperity and economic health of their nation. However, the decade between the period 2001 and 2010 proved to be extremely disastrous for Germany as it was popularly called the sick man of Europe during this period.
Though this scenario and ill-reputation had surprising changed currently due to the astonishing growth the German economy, during the decade under discussion, the German economy grew at half a pace at which the American economy prospered. The 21st century for Germany did not have a great or healthy start. The scenario of the German economy at the start of the 21st century was such that wages were mounting and the rate of unemployment was sky rocketing.
The German budget had to bear massive burdens upon it as there were huge amounts of transfers being done to the formerly Eastern part of Germany. The German economy as a whole was being sifted because of tough regulations and this eventually resulted to German companies moving their base to places outside of the nation, specifically to a few places in Eastern Europe.
In the year 2004, there was lot of turmoil in Germany as a result of the government’s decision to cut the benefits for unemployed people as well as other labour reforms. Between the period 2001 and 2010, the wages in German increased by an average of just 1.1%, which was a nominal growth and this left the entire German economy flat in real terms. The cost of Unit labour were floored sharply in comparison to the same in other economies.
The financial crisis of the year 2008 led to the exports to plummet for a limited time period, and in three years prior to the crisis, the demand from the euro zone’s territory also declined dramatically. However, the German manufacturers have been more than recompensed because of the weaker euro that permitted its export machine to whine on.
“As a share of GDP German investment has fallen sharply, from 22% in 2000 to 17% in 2012. The euro zone now accounts for 37% of German exports, down from 46% in 2000.” The performance of the economy during this decade was below average and this led to the country being coined to be the sick man of Europe.
In the year 2005, the unemployment rate in the German economy was actually the 6th highest among all the OECD countries – a rate that was close to 11 %. However, by the year 2011, the German rate reached a surprising level of almost half of what it was in 2005 and the country was one among the ten nations to have lowest unemployment rates among the OECD nations.
The fiscal years during this particular decade failed to adequately restrain to boost the government debt accumulated during the earlier decades. “As a share of GDP German investment has fallen sharply, from 22% in 2000 to 17% in 2012.” Public investment were also squeezed and industries within Germany became extremely cautious about capital spending. Also, the absence of a boom in the real estate industry, the amount of investment in this particular field was highly negligible.
All of the various happening within Germany resulted in the nation and economy of Germany being called as the sick man of Europe.
BBC. (2014, December 24). Germany Profile. Retrieved from BBC - News Europe: http://www.bbc.com/news/world-europe-17301646
Funk, L. (2012). The German Economy During the Financial and Economic Crisis since 2008/09 - An Unexpected Success Story Revisited. Bornheim: Druckerei Franz Paffenholz GmbH.
German Federal Statistics Office. (2010). Data. Retrieved from German Federal Statistics Office.
Gurria, A. (2010). Launch Survey Germany – Remarks by OECD Secretary General. Retrieved from OECD: http://www.oecd.org/germany/launchofthe2012oecdseconomicsurveyofgermany.htm
The Economist. (2013, June 15). Dissecting the Miracle. Retrieved from The Economist: http://www.economist.com/news/special-report/21579145-ingredients-german-economic-success-are-more-complex-they-seem-dissecting
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